A number of factors are allegedly restraining the trend of growth, including the lingering impact of the 2008 financial crisis, an aging population and even a slowdown in the underlying rate of innovation and technological change. According to Christopher Ragan, Canada’s governments have run out of options to stimulate the economy; others cite the uncertainty created by the unprecedented monetary and fiscal stimulus in response to the financial crisis and recession as a major drag on the recovery itself.

According to a paper released last month by the Fraser Institute, there is reason to believe that pessimism about growth will prove to be an overreaction to the current environment, just as happened in the 1930s and 1970s. These past periods of prolonged slow growth ended when governments adopted better and more predictable policies.

As the price of oil falls and the lingering effect of the financial crisis dissipates, the U.S. economy is slowly improving. The United States seems poised to return to above-trend rates of growth, as shown by a string of strong employment reports. In Canada, both gross domestic product and employment surprised to the upside in the latest month, even as a majority of Canadians say they think the economy is in decline.

The last time a slumping resource sector and robust growth in the United States occurred simultaneously was in 1998, when growth in Canada accelerated. This implies that a stronger U.S. economy can trump lower commodity prices. The importance of our resource sector has increased since then, which will dampen growth somewhat, but the impact will be less for the real economy than for the stock market, which appears to be driving the public’s perception of how much difficulty the economy is in.

An aging labour force is much more of a problem for Europe and Japan than North America, which has a younger population that is not projected to contract in the future due to high immigration. The possibilities for innovative technological change remain encouraging for growth, although this variable is the most difficult to project.

In Canada, growth since the recession has not been unusually weak compared with the previous two decades. Last year’s real GDP growth of 2.5 per cent exceeded its 25-year average, which was reflected in the historically low level of adult unemployment of 5.5 per cent.

Canada is well positioned to take advantage of an upturn in the U.S. economy, since the lingering effect of the recession in the financial sector and labour markets was much less pronounced than in the United States. This will help Canada overcome the slump in commodity prices. A further boost to growth would come from a better policy framework, especially in Central Canada where provincial government debt continues to increase. More policy stimulus, such as the Bank of Canada’s interest rate cut earlier this year, is not needed in North America at this time; growth would be better served by more predictable policies.

In January, the Conference Board of Canada warned that Alberta could slip into recession and today, opinion regarding the province’s economy remains unchanged.

Speaking to the board’s Western Business Outlook event on Tuesday in Edmonton, the conference board chief economist Glen Hodgson said, “My fear is that the forecast is still a little bit too optimistic”.

Given the downturn in Alberta’s energy sector, the previous four years of “phenomenal” growth will take “a significant hit” in 2015, the conference was told.

This will lead to reductions in energy companies’ capital spending plans, a shortfall in royalty revenues and a slowdown in people moving to Alberta from within and outside Canada. It will also mean that gains in Albertans’ primary household income will be reduced to one per cent in 2015. This has led to decreased consumer confidence while real estate sales, prices and housing starts are trending down.

In January, the conference board warned that Alberta could slip into recession in 2015 and would feel the largest drop in gross domestic product of any province. The board also warned that business investment in 2015 could be down by $12 billion.

In February, the organization forecast that while Canada’s GDP will grow 1.9 per cent this year, Alberta’s economy will shrink 1.5 per cent. Alberta’s ability to recover from the downturn will depend on oil prices increasing. West Texas Intermediate crude that traded at more than $100 US last summer is now around $50.

With stronger oil prices into 2016, Alberta should see “moderate” 1.5-per-cent growth compared to 2.3 per cent for Canada. “Alberta will re-emerge as a strong part of Canada’s economy,” Antunes said.

Brad Ferguson, president of the Edmonton Economic Development Corp., said Alberta’s story has sounded “unnecessarily negative” of late and he believes that Edmonton is well-positioned to deal with its share of Alberta’s economic challenges, Ferguson told the conference.

The Canadian economy performed surprisingly positively in October and is set to extend its broadly-based growth with higher exports to the U.S., but uncertainty remains over the impact of lower oil prices on the energy sector.

According to Statistics Canada, Gross domestic product rose 0.3 per cent to an annualized $1.65-trillion in October, after a 0.4-per-cent gain in September. October was expected to see growth a 0.1-per-cent growth.

The Toronto Stock Exchange’s S&P/TSX composite index was up by 1.01 per cent, to 145.91 points, in early afternoon trading, at 14,578.29 on news of the strong data as well as slightly higher oil prices.

The U.S. economy grew at a 5-per-cent annual rate in the third quarter, its fastest pace in 11 years, boosted by consumer spending and outpacing Canada’s gains. This is a welcome outcome for Canada’s exporters, as increased demand benefits the manufacturing sector.

However, impacts of the potential longer-term damage of dramatically lower oil prices to the country’s oil and gas companies are under scrutiny as well.

“The Canadian economy is off to a surprisingly strong start to [the fourth quarter] with the good handoff from September providing a nice additional boost,” BMO Nesbitt Burns senior economist Benjamin Reitzes said in a research note. “While growth will likely decelerate in the final two months of 2014, it looks as though [fourth quarter] GDP growth is going to be around 2.5 per cent annualized unless November and December weaken materially.”

But he added that 2015 appears to be more challenging “as the drop in oil prices starts to bite.” GDP growth looks to be on a path to slow to a sub-2-per-cent pace in the first half of 2015, the weakest since 2012, he said.

PNC Financial Services Group’s senior international economist Bill Adams said he expects Canadian real GDP growth will show “modest improvement” next year but will lag GDP growth in the U.S., “which looks likely to exceed 3.0 per cent in 2015.”

“The real worries lie in what the collapse in crude means for next year,” CIBC World Markets’ Nick Exarhos said.

Oil production volumes were up a surprising 1.5 per cent in October but the damage from the fall in crude prices will be felt as firms in the sector cut spending plans in the first half of 2015.

October saw a rise of 0.7 per cent for manufacturing output, the highest in six years. According to National Bank Financial senior economist Krishen Rangasam, this was likely due to stronger U.S. demand and the impact of the lower Canadian dollar.

Royal Bank of Canada economist Paul Ferley agrees that oil price declines will likely hurt sector investment but says that should be offset by Canadian exports to the U.S. and higher Canadian consumer spending thanks to lower gasoline prices.

Other factors providing a boost to GDP in October was the 0.8-per-cent rise in public sector output, including a 2.6-per-cent growth in educational services, which got a bump from the return to work of striking British Columbia teachers. Among other sectors, Statistics Canada said services posted a 0.3-per-cent gain.

Two closely linked economies but two very different recoveries: that’s what you get when you compare Canada’s performance with that of the U.S. over the past few years.

According to Douglas Porter, chief economist at BMO Capital Markets, the most notable difference between the US and Canada is the widely diverging performance of the two job markets since the financial crisis erupted seven years ago.

In the 2007-to-2011 period, Canada fared a lot better than the U.S. when it came to job growth. However since 2013, it’s the U.S. that has churned out better numbers. To understand the difference, it helps to look back at the years since the recession began. Canadian government country reacted quickly to the recession with massive stimulus programs to support employment. By contrast, the U.S. state and local governments had to run highly austere policies that weakened the recovery south of the border.

Fiscal policy wasn’t the only difference. The housing market in this country was hit much less hard than in the U.S. and rebounded faster from the recession. The banking sector was in much better shape on this side of the border, maintaining its level of mortgage lending while borrowers responded enthusiastically to rock-bottom interest rates.

In the U.S., by comparison, housing took the brunt of the recession’s blow, falling steadily through the 2007-to-2011 period amid tight lending conditions that kept buyers away. Canadian auto sales returned to normal soon after the recession ended whereas U.S. auto sales are only now returning to pre-recession levels.

Taken together, the housing, consumer spending and government sectors tend to be rich in jobs and light on productivity. So when they started to improve, employment spiked up in all three. Today, the picture looks a little different as Canada now lags the job creation pace of the U.S. One reason is that this country has come to rely much more on exports to fuel its recovery.

The export sector is often tied to investments in equipment and manufacturing, which tend to improve productivity and lower job creation. So, while we’ve had respectable economic growth, the job numbers lately have been disappointing.

The result has been solid employment gains without particularly strong growth in GDP so far. The best for the U.S. could be yet to come as it catches up. The U.S. will be playing catch-up on economic growth for a while and should see much firmer employment and probably better GDP growth.

The Federal Reserve is likely to begin raising U.S. interest rates next year, at least three months before Canada does. That should lead to a stronger U.S. dollar and softer Canadian dollar.

As for stocks, improving productivity and earnings, combined with a delay in Bank of Canada tightening, should help the TSX holds its ground. But the recent run of outperformance will be hard to sustain if the U.S. economy outpaces Canada’s.

Once again the two economies are likely to follow different tracks as the recovery unfolds.

Canadian companies are posting their best profit in three years, fueling hopes that business spending will resolve the sluggish economic growth seen in recent times. Statistically, 78% of companies in the Standard & Poor’s/TSX Composite Index reported higher revenue than a year ago, as companies such as Canadian Natural Resources Ltd. and Magna International Inc. benefitted from stronger U.S. growth and a weaker Canadian dollar.

Increased capital investments from the country’s largest corporations will be advantageous for Canada’s economic recovery, which is forecast to grow 2.2% in 2014. Both the government and the Bank of Canada have called on businesses to re-invest their profits into the economy.

Federal Finance Minister Joe Oliver said at a news conference recently that he wanted to learn why companies aren’t investing cash on their balance sheets.

Canadian equities have increased by 12% ,a record this year, the second-best among major developed markets, led by gains among commodities producers and manufacturing companies on a combination of greater global demand, higher prices and a weaker loonie. The loonie has dropped 5.3% against the U.S. dollar over the past year.

Many of Canada’s oil producers and exporters operate in Canada while selling their products in U.S. dollars, benefiting from the weaker exchange rate. According to Bloomberg, 62 energy companies have reported a 21% increase in sales from a year ago. Corey Bieber, chief financial officer at Canadian Natural Resources, reported a 41% increase in revenue to $5.37 billion.

Oil prices have decreased in the past month with Brent crude sinking to a 13-month low of $103.02 a barrel after the International Energy Agency said a supply glut was shielding the market against threats in the Middle East. West Texas Intermediate crude has closed below $100 a barrel since July 31.

John Stephenson, portfolio manager and chief executive officer at Stephenson & Co. in Toronto, said prices even at current levels remain positive for oil producers and demand for crude will continue to grow in the developing world.

If you are thinking of an immigration project to Alberta (via a work permit or Canadian permanent residence) it is noteworthy that while there are plenty of employment opportunities, there is also a lot of personal household debt.

A report from Bank of Montreal puts average household debt in the western Canadian province at 124,800 Canadian dollars ($114,000) in 2014, a sharp increase from last year’s C$89,026.

That 40% rise far exceeds the 5.7% increase across Canada, which took the national average household debt level to C$76,100 in 2014, the report says. The report is based on survey of 1,002 Canadians conducted for BMO in late June and early July by research firm Pollara.

BMO says the dramatically higher household debt in Alberta may partially reflect the rapid escalation of housing prices in that province, whose economy continues to boom due to its vigorous energy sector. Albertans carry nearly twice the average household debt than households in Ontario, which the BMO report puts at C$67,507.

Ontario and seven other provinces all fell below the national average. Only British Columbia, exceeded the national average, with debt at C$99,900. The report indicated 43% of Canadians hold mortgage debt, up 13% from a year ago. The rising share of households with a mortgage is driven partly by the active participation of first-time buyers, mainly younger Canadians, BMO said.

More than half of all households are carrying a credit-card balance, although that total declined to 52% from 56% in 2013. BMO said student loans have remained stable, with 15% of households reporting that type of debt.

Canada’s oil-producing provinces have been ranked among the world’s top economic performers in a newly released think-tank report.

Each year, the Conference Board of Canada ranks 16 of the world’s richest countries in terms of economic performance, based on factors such as growth and employment rates. This year, however, the Canadian think-tank not only analyzed the country as a whole, but also broke down and compared the economies of the ten different provinces.

The findings were somewhat surprising, due to the disparity between those provinces whose economies are oil-based and those that are not. While overall Canada ranked fifth among the world’s richest countries, Alberta, Saskatchewan and Newfoundland were ranked the top three jurisdictions in the world, when graded separately.

The top-rated economy was Alberta, which outperformed the top-rated country Norway by about $10,000 per capita on income. Ontario, British Columbia and Prince Edward Island all ranked in the middle of the group with countries like Germany and the United Kingdom. At the bottom of the pack were France, Belgium and the Canadian provinces of Nova Scotia and New Brunswick.

“What this tells us is we have provinces outperforming the rest of the world, and we have provinces that are struggling along with the laggards in the Eurozone,” said Conference Board project director Brenda Lafleur.

The report predicts continued strength for the three oil-producing countries, and recommends that the lagging provinces work on productivity initiatives to boost their economic performances.

Canada’s overall fifth place ranking is an improvement after coming in sixth last year.

Quebec has a great record when it comes to finding new ways of doing things. However, one sector that continues to search for a solution is Quebec’s higher education system – the prime question for many people in the previous election, some 19 months back. This time though, it has been conspicuous by its absence.

Despite that, the question remains unanswered – How does an individual pay for a university system that offers both access and quality? Although this debate is not a new subject for Quebec or for the rest of the world, Quebec must emerge with the answer.

Committed citizens speak of a renaissance for Montreal, which happens to be Canada’s second largest city. However, despite having over 225,000 students at the universities and Cégeps, Montreal still hires less university graduates annually than any other major city in Canada.

It would be impossible to think of a similar renaissance for Quebec without finding some noteworthy funding solutions first. Until then, Quebec needs to find ways to keep its university system and economic future strong. In addition, Quebec also needs to find ways of retaining the talented students it attracts, once these students graduate. According to the president of Concordia University in Montreal, Alan Shepard, Quebec could achieve this in three possible ways.

The first method involves facilitating student immigration and seeking help from universities for this. This means that the authorities must simplify the bureaucratic processes. By connecting these students to the commercial and civic realms of Quebec and teaching them French, the universities could retain these students.

The second proposal entails providing additional physical spaces, linked together by networks, which would enable students to take control of their creativity and innovations. For example, Concordia launched District 3 in 2012. This multi-disciplinary incubator enabled Concordia’s students and alumni to work side-by-side for coming up with solutions or ways to build their own businesses.

The third method entails providing tax incentives for promoting a culture of innovation even further. Last summer, for example, Governor Andrew Cuomo commenced New York’s incubator networks with Start-Up New York, which offered tax credits to businesses that got established on or near a university campus and also supported the university’s mission.

Currently, universities favour merit and access along with the highest ideals of learning. If Quebec could harness these and make them drivers of civic and economic equality, their contribution to Quebec’s future could be invaluable.

Canada must recognize the potential economic advantage that immigrants bring if it wishes to remain globally competitive, according to one of the country’s top economists.

In a recent piece for the Globe and Mail, Royal Bank of Canada chief executive officer Gordon Nixon, calls for more efforts to tap into under-utilized immigrant skills. He points to a recent RBC study which found that if newcomers earned equal wages to their Canadian-born counterparts, personal income in Canada would increase by $31 billion.

Nixon first calls out employers, saying that more needs to be done to promote diversity in the workplace and embrace international experience.

“A work force with global experience is a competitive advantage,” argues Nixon, who is also chair of the Toronto Region Immigrant Employment Council. “International experience is an asset to business. Too often, we hear that newcomers with no Canadian experience would be hard to fit into the Canadian work force. In truth, international experiences relate directly to the modern Canadian context.”

Secondly, states Nixon, governments need to continue the work that they are doing with other levels of government, as well as stakeholders in the community. More funding should go toward skills assessment and training, as well as community support services and cultural activities.

Immigration has helped make Canada the country it is today. We must not forget that part of our heritage if we wish to continue to contribute and compete in the interdependent global marketplace.

“The lesson of our history is clear and points the way to future economic prosperity and success: Canada has relied on diversity and immigration to build a prosperous economy and will continue to do so in the years ahead. We are good at it, but we need to get better to maintain that competitive edge.”

As wealthy Americans continue to forge ahead of several of their global peers, the American middle class – for long the most affluent in the world – seems to have lost that distinction, according to an analysis conducted by New York Times.

The analysis, based on surveys conducted over the past 35 years, shows that citizens of other advanced countries have obtained considerably larger raises over the past three decades across the lower-and-middle-income tiers. In addition, Canadian middle class incomes (after tax) are higher than in the United States – this, after falling significantly behind US middle class income standards in 2000. The numbers suggest that high and rising income inequalities are to blame for this decline in American middle class income levels.

Most economic experts cite statistics like the per capita gross domestic product to show that the US has maintained its lead as the world’s richest country. However, these figures do not focus on the distribution of the income, as much as they do on averages. As most recent income gains usually flow to a relatively smaller group of high-earning households, it is clear that most Americans are not at par with their counterparts around the globe.

Three factors could be behind this phenomenon. Firstly, educational attainment has slackened in the US as opposed to other parts of the industrialized world. This has made it harder for the American economy to retain its control over high-skilled, well-paying jobs. While American aged from 55 to 65 years have above average literacy, numeracy and technology skills as compared to 55-to-65-year-olds in the rest of the industrialized world, Americans from 16 to 24 years of age rank closer to the bottom among rich countries.

The second factor contributing to this is that companies in the US distribute a smaller share of their wealth to the middle class and the poor as opposed to companies elsewhere in the industrialized world. Finally, the governments in Canada and Western Europe are aggressively ensuring that they redistribute income to raise the take-home pay of low-and-middle-income households.

Despite this drop in income levels for the American middle class and the poor, the fact remains that the US continues to register stronger economic growth. Americans still earn 20 percent more than their Canadian counterparts do. They also earn about 26 percent more than their British counterparts and 50 percent more than their Dutch counterparts do. However, it appears that only a small percentage of American households is benefiting from this growth of the world’s most prosperous economy.